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This resource covers the theory of psychological contracts in organizational employment - and wider 'psychological contracting' in relationships, communications and societies - and the psychological contract 'iceberg' diagram.
The term psychological contract refers to the often unspoken set of expectations and assumptions that two parties (employees and the organisation, its leaders and managers) have of each other about things like how they will behave and act.
The importance of a psychological contract in the workplace. Types of psychological contracts. How to create an effective psychological contract. Psychological contract examples. Signs of a breakdown in the psychological contract. What HR can do to fix a broken psychological contract.
A psychological contract refers to the unwritten expectations, beliefs, and perceptions that individuals hold about the reciprocal obligations between themselves and their employers. It encompasses both explicit (formal employment terms) and implicit (unspoken expectations) elements of the employment relationship.
Psychological contracts are key in shaping a company’s culture and keeping employees committed. These unspoken agreements outline what employers and employees expect from each other. As work changes, so do these contracts, showing how work and employee needs evolve.
Rousseau distinguishes four phases in psychological contract formation and evolution. Firstly, in the pre‐employment phase, professional norms and societal beliefs play a general role. Secondly, more specific components of psychological contracts are formed in the recruitment process.
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Should 'psychological contracts' and 'contracting' be accepted in society?
Unlike the legal contract of employment, the psychological contract is not tangible. It’s built on the everyday actions and statements made by one party and how they are interpreted by the other. This factsheet explores the psychological contract in the context of the employment relationship.
